Luminor Bank AS today publishes its interim report for the second quarter of 2020. The results demonstrate the bank's strong financial standing, providing a robust platform to support customers through the current challenging environment.
Luminor reported an increase of 10.3% in deposits compared to the same quarter last year, which improved the bank's funding position; in Q2, Luminor's loan to deposit ratio was 93%. In addition, Luminor has completed its transition to a fully independent funding structure as the bank repaid its credit line from DNB and Nordea, this facility remains in place as a stand-by facility. Net profit in the second quarter amounted to 13.5 million EUR, a significant improvement to the previous quarter which was adversely impacted by larger loan loss provisions in relation to COVID-19. The underlying business performance continues to improve as reflected in the improved cost-to-income ratio which stood at 51.3% compared to 54.6% in the second quarter last year.
To help its customers withstand the current crisis, Luminor continues to provide financing and simplified grace period solutions to both private individuals and corporate customers in all three Baltic states. The Baltic governments launched response programs to mitigate the negative effects from the pandemic and stimulate the economies and Luminor is utilising these state guarantees to the benefit of its customers.
Luminor kept its customer service centres open throughout the crisis but with strict measures in place to protect both staff and customers. The remote onboarding service, which was already operating in Latvia, was introduced in Lithuania during the period and we plan to roll out this service to Estonia in Q3. We also introduced online meetings, video meetings and a pre-booking system for Customer Service Centres to further increase the availability of remote services for our customers.
We continued to make progress with becoming fully independent from the networks and systems of our former parent banks, DNB and Nordea. During the second quarter of 2020, Luminor finalised the migration of customers in Lithuania to the independent common technology platform. Since the period end, we migrated Luminor’s customer base in Latvia with the vast majority of this work taking place in June.
Luminor Bank CEO, Erkki Raasuke, said: “The Baltics have handled the current COVID-19 crisis well. Constructive cooperation between different stakeholders from both the public and private sectors in the Baltics enabled us to mobilise quickly and act decisively to support private individuals, as well as companies during these difficult times. We should now concentrate on restarting our economies while keeping safety considerations in mind. We are grateful to our customers for turning to us for advice and support during these trying times and we assure them that we will continue to be here for them as we emerge from the crisis and head into the recovery phase.”
Luminor Q2 2020 report can be found here.